Enforcement Litigation and Compliance

Washington, DC

December 9-10, 2015

The Growing Role of Social Media

Richard Cleland, Assistant Director, Federal Trade Commission, Bureau of Consumer Protection

Dale Cooke, President, PhillyCooke Consulting

Susan Crane, Senior Advisor, EAS Consulting Group, LLC

Colleen Heisey, Partner, Jones Day

Moderated by Avia Dunn, Associate Skadden, Arps, Slate, Meagher & Flom LLP

The Importance of Social Media

Presented by Dale CookePhillyCooke ConsultingDCooke@PhillyCooke.com@PhillyCooke

10 December 2015

Shifting Media Consumption

% of time spent with each channel of all time spent with media per day

eMarketer October 2014

Shifting Media Consumption

% of time spent with each channel of all time spent with media per day

eMarketer October 2014

All digital went from 30% to 47%

Shifting Media Consumption

% of time spent with each channel of all time spent with media per day

eMarketer October 2014

Mobile exploded

from 4% to 23%

Is it So-Mo or Mo-So?

April 2014

Minutes spent on social media

Phone

20

Tablet

15

Mobile

35

Desktop/

Laptop

32

Photo by Michael Coghlan via Flickr

Photo by Michael Coghlan via Flickr

1 in 5 minutes spent on mobile

is spent on Facebook

Demography is destiny!

Social media "likes" healthcare, 2012

of millennials trust health information or engage in

activities found via social media

90%

Photo by NEC-Medical-51 via Flickr

Doctors are people too!Doctors are people too!

Photo by NEC-Medical-51 via Flickr

Doctors are people too!Doctors are people too!

56%

of HCPS use social mediafor professional purposes

The Growing Role of Social Media:

Drugs, Biologics, and Devices

Colleen Heisey, Partner

Jones Day

December 10, 2015

The Social Media Universe

• General platforms: Facebook, Instagram, Pinterest, Twitter, YouTube

• Community-specific platforms: PatientsLikeMe, Sermo, Doximity, ResearchGate

Why Are Companies Using It?

• Unique features of social media: – Decentralized, user-generated content– Rapid and dynamic– Opportunity for dialogue

• Growing acceptance among consumers– One-third of consumers willing to have social media

conversations monitored if it would help improve or coordinate care

• Big data! Helps complete the patient profileSource: PwC, 2012

Social Media Use by Life Sciences Companies

• Product promotion• Clinical research • Startup financing

• Legal authorities:– FDA regulations and guidance– HHS, NIH requirements– Other laws

Digital Advisory Boards

• Committee of managers and/or external experts to advise on digital strategy, including social media

• Organizational considerations

Food and Drug Administration Safety and Innovation Act (FDASIA) of 2012

• Not later than 2 years after the date of enactment [i.e., by July 9, 2014], FDA shall issue guidance describing FDA policy regarding Internet promotion, including social media, of medical products regulated by FDA (FDASIA § 1121)

Topic Status

Accountability Draft (January 2014)

Space limitations Draft (June 2014)

Correcting misinformation Draft (June 2014)

Use of links On guidance agenda for 2015

Adverse event reporting No guidance issued

FDA Draft Guidance Issued to Date

• Internet/Social Media Platforms with Character Space Limitations—Presenting Risk and Benefit Information for Prescription Drugs and Medical Devices (June 2014)

• Internet/Social Media Platforms: Correcting Independent Third-party Misinformation about Prescription Drugs and Medical Devices (June 2014)

• Fulfilling Regulatory Requirements for Postmarketing Submissions of Interactive Promotional Media for Prescription Human and Animal Drugs (January 2014)

Platforms with Character Space Limitations – Presenting Risk & Benefit Information

Internet/Social Media Platforms with Character Space Limitations

• Describes how prescription drug, animal drug, and medical device firms that choose to present benefit information on electronic/digital platforms associated with character space limitations should present both benefit information and risk information

• Specifically, on the Internet and through social media or other technological venues

• Examples:

– Twitter (140 characters/spaces per tweet)

– Google’s “Sitelink extensions” (sponsored links; 25 characters or fewer per link; two optional lines of description, 35 characters or fewer per line)

Internet/Social Media Platforms: Correcting Independent Third-party Misinformation about

Prescription Drugs and Medical Devices

Correcting Independent Third-Party Misinformation About Prescription Drugs and Medical Devices

• Misinformation: positive or negative incorrect representations or implications about a firm’s product created or disseminated by independent third parties who are not under the control or influence and that is not produced by, or on behalf of, or prompted by the firm in any particular

• Firm may choose to respond, but is not required

• May provide appropriate truthful and non-misleading corrective information or

• May provide a reputable source from which to obtain the correct information, such as the firm’s Chief Medical Officer

• Direct or indirect correction

Fulfilling Regulatory Requirements for Postmarketing Submissions of Interactive Promotional Media for

Prescription Human and Animal Drugs

Fulfilling Regulatory Requirements for Postmarketing Submissions of Interactive Promotional Media for

Prescription Human and Animal Drugs

• At time of initial display, a firm should submit in its entirety all sites for which it is responsible

• For third-party sites on which a firm’s participation is limited to interactive or real-time communications, submit the home page of the third-party site, along with the interactive page within the third-party site and the firm’s first communication at the time of initial display

• Once every month, a firm should submit an updated listing of all non-restricted sites for which it is responsible or in which it remains an active participant and that include interactive or real-time communications

Instagram, Twitter, & Facebook: #morningsickness

#CorrectiveAd

YouTube

• Text of statements made by Ty Pennington in video (no longer available): 

Now once I got on medication it’s just amazing the transformation I made. It literally changed my life, and gave me the confidence to achieve my goals, like being an artist. As a kid, I never could have imagined I could do it. But with the medicines like Adderall XR, it’s truly a transformation. I mean talk about an Extreme Makeover, I’m like living it. Now growing up with ADHD can be a little difficult. It’s not easy to communicate with people, including your own family. So you become kind of alienated. You feel like you’re different, and you don’t really fit in. And that, well, can kind of cause you to feel different, and nobody likes to feel different. So as someone who has had ADHD, and is overcoming it, proper treatment has truly changed my life and made an amazing difference.

YouTube

Sponsored Links

Facebook

Social Media Widget, Facebook

Social Media Widget, Facebook

Districts and Health Fraud

Crowdfunding

The Growing Role of Social Media

Colleen M. Heisey

Partner, Jones Day

51 Louisiana Avenue, NW

Washington, DC 20001

202-879-3449

cmheisey@jonesday.com

Dietary Supplements & Social Media Compliance

Susan Crane

Senior Advisor for OTC Drugs & Labeling

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

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“Social” mediaTwo-way flow of informationTraditional media = one-way Websites may be both: •Language often considered extension of labeling •Interactive – allow for ordering of product or coupons, contacting company for more information

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

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Historical PerspectiveMid-1990’s

Beginning of use of term “social media”

Passage of Dietary Supplement Health & Education Act (DSHEA) - 1994

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

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Rapid Growth of IndustryLax regulation brought on by DSHEA?

OR

Advent of social media and its widespread / ease of use?

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

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ResultIndustry is NOT unregulated as often reported

Number of products/popularity of supplement use makes it difficult for FDA to enforce

Companies recognize this and take advantage, using social media to market their products far and wide.

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

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2014 Game changerFDA Warning letter citations for Facebook promotions: companies “liking” personal testimonials

“Likes” considered equivalent to an endorsement / promotion of product

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

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2015 Enforcement Actions

Adulteration: Drug products labeled as dietary supplements. Separate issue, but giving industry a bad name.

Misbranding: Dietary supplements marketed for “conditions that would cause them to be drugs”.

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

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Pristine Nutraceuticals – 1/21/15

“Digesticure”•Therapeutic claims on website (from which orders for product could be placed)

•Link to external site “symptom checker” – analysis and response

•Link to external site “thecodeoflife.info” – personal testimonials describing use of product for diseases

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

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MPH Nutrition, LLC – 10/1/15

“Re:Mind Recover”

•Therapeutic claims on website (from which orders for product could be placed)

•Videos & documents suggesting product beneficial for treatment of brain injuries

•Facebook “likes” of personal testimonials

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

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Strictly Health Corp. – 5/7/15

“Fenvir”

•Joint FDA / FTC Warning Letter – violated both labeling and advertising regulations

•Website: contained claims, took orders for product

•Social media (Facebook, Tumblr, Pinterest, YouTube and Twitter) linked to website

Dietary Supplement and Non-prescription Drug Consumer Protection Act

Serious Adverse Event Reporting Requirements

•Labeler required to submit to FDA all SAE reports received through the address or phone number on the label

•FD&C Act does not expressly provide for SAEs that are received by other means but the reporting of such adverse events is required by the plain language of section 761(b)(1) of the Act ("shall submit . . .any report received of a serious adverse event associated with such dietary supplement.)

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

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Implementation Suggestions•Monitor social media for comments & posts regarding SAEs for products•If person posting can be identified and privacy concerns not compromised, seek out for additional information•Include webmaster in training programs regarding adverse event reporting•Don’t forget 3rd party sites (e.g. Amazon) where product reviews/complaints may be posted.

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

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Bageladies – 8/18/15

• Labels and website/social media pages reviewed during FDA inspection of facility

• Nutrient content claim "60% Fewer Sugars" used incorrectly (without including a reference food) on labels, website and in both Twitter and Facebook posts.

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

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Red Mill Farms – 9/17/15• Labels reviewed during FDA inspection of

facility • Labels included product website addresses • Non-compliant nutrient content claims,

express & implied(http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2015/ucm463598.htm)

• Products (macaroons) were being promoted as drugs (“Coconut’s lauric acid has unique anti-microbial qualities …”)

© EAS Consulting Group, LLC

© EAS Consulting Group, LLC

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How to comply?• Firms need to recognize that websites and other

social media are considered an extension of labeling

• Become familiar with labeling regulations, particularly with regard to claims and what is / is not allowed

• Review FDA guidance documents

• Pay attention to customer postings for potential product problems / adverse events

Thank You

EAS Consulting Group, LLC

1700 Diagonal Road, Suite 750

Alexandria, VA 22314

(877) 327-9808 Toll Free

(571) 447-5500 Local

(703) 548-3270 Fax

www.easconsultinggroup.com

© EAS Consulting Group, LLC

Maybe they will listen to you!

Advertising Through Social Media

Richard L. Cleland

Assistant Director

Division of Advertising Practices

Federal Trade Commission

December 10, 2015

The War on Advertising

Consumers fed up with ads are blocking you

What are you going to do about it?

Cover of the September 14th edition of Advertising Age

Reference Material• Business blogs https://www.ftc.gov/tips-advice• .com Disclosures: How to Make Effective Disclosures in Digital Advertising https://ww

w.ftc.gov/tips-advice/business-center/guidance/com-disclosures-how-make-effective-disclosures-digital

• The FTC’s Endorsement Guides: What People Are Asking https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-endorsement-guides-what-people-are-asking

• Guides Concerning the Use of Endorsements and Testimonials in Advertising https://www.ftc.gov/sites/default/files/documents/federal_register_notices/guides-concerning-use-endorsements-and-testimonials-advertising-16-cfr-part-255/091015guidesconcerningtestimonials.pdf

• Ann Taylor Loft (bloggers who attended a spring fashion preview failed to disclose that they received free gifts for posting blog content about the event)

• Hyundai (bloggers who had been given gift certificates as an incentive to include links to Hyundai videos and/or comment on forthcoming Superbowl ads)

• Hewlett-Packard (bloggers who were asked to blog about HP Inkology received $50 gift certificates)• Nordstrom Rack (influencers who attended store openings promoted as a “Tweetup” provided gifts, including $50 gift certificate)• Nokia-Lumia (Microsoft sponsored media campaign using social influencers to tweet photos taken with Lumia camera)• Cole Hann (contestants eligible for $1,000 shopping spree who pinned five shoe images on Pinterest page) • Allison Rhodes (“Safety Mom” appeared on national and local television programs failed to disclose that she received compensation from

product manufacturer)• Dentastix (Mars engaged vets (television) and bloggers to increase brand awareness with no disclosure) • Yahoo (Yahoo employees posted positive reviews of Yahoo apps in iTunes app store without disclosing material connection)• Village Green Network (advertising network – VGN did not require its network bloggers to disclose that they had received compensation

from marketers)

Closing Letters

59

• Reverb (employees posed as ordinary consumers posting game reviews at the online iTunes store, and not disclosing that the reviews came from paid employees working on behalf of the developers)

• Deutsch (urged its employees to create awareness and excitement about the PS Vita on Twitter, without instructing employees to disclose their connection to the advertising agency or its then-client Sony)

• ADT (misrepresented that paid endorsements from safety and technology experts who appeared as guests on news programs and talk shows were independent reviews)

• Legacy Learning (affiliate marketers who posed as ordinary consumers or independent reviewers)• Spokeo (employees posted glowing recommendations of the company’s services on news and technology

websites without disclosing their true identity)• Machinima (paid “influencers” to post YouTube videos endorsing Microsoft’s Xbox One system and several

games – influencers failed to adequately disclose that they were being paid for their seemingly objective opinions)

Enforcement Actions

60

Same standards apply to all media

61

FTC Endorsement Guides• Explain how Section 5 of the FTC Act applies to endorsements &

testimonials in advertising

• An endorsement is an advertising message that consumers believe reflects the views of someone other than the sponsoring advertiser

• An endorsement should reflect the honest beliefs, opinions, experiences of the endorser

• An advertiser can’t make claims thru endorsers that it couldn’t make directly itself: endorsement claims need to be substantiated

63

Disclose “material connections”

Examples of Material Connections

• Endorser received compensation for endorsement– E.g., cash, gift cards, free product, discounts, chance

to win significant prize• Endorser is employee, business associate of advertiser• Endorser is related to advertiser

Context Matters

• Is the relationship or connection between the endorser and the marketer apparent from the context of the endorsement message?

• If so, then no disclosure is necessary

• If not, then the connection should be clearly and conspicuously disclosed in the endorsement message

How Should Material Connections Be Disclosed?

• Disclosure should be part of the message so it can’t be missed. E.g.:– ABC Co. sent me this product– I was given this product to try by ABC Co.– On Twitter: #ad or ad, #paid, #sponsored

Background on Disclosures• There are many ways to make effective disclosures• Required disclosures must be presented “clearly and

conspicuously”• FTC looks at how consumers actually perceive and

understand the disclosure within the context of the entire ad

• Factors that affect whether disclosures are effective include proximity & prominence

• May 2015 FTC posted revised FAQs on the Endorsement Guidelines

• Questions we have been asked since the adoption of the Endorsement Guidelines

• Some are based on our cases and closing letters

Revised FAQs

68

• Employee endorsements• Likes• Contests and Sweepstakes• Affiliate Marketing• Online Reviews• Monitoring

Revisions

69

• Everyone on the Internet understands the insider shorthand and abbreviations we use.

• It is common knowledge that everyone on the Internet that says anything nice about a product or service is shilling.

Social Media Myths

70

• Rules apply to all platforms:– Personal blogs– Twitter– Facebook– Pinterest– YouTube– Instagram

Platform

71

• The rules don’t apply to famous celebrities.• What is the context of the endorsement?

– Classic ad– TV talk show– New media

• How widespread is the knowledge that the celebrity is a paid spokesperson for the product or service?

Another Myth

72

• Sponsored brand campaigns to get people to like, pin, tweet, etc. will usually require a disclosure.

• Brands probably shouldn’t run such campaigns in platforms that don’t allow for disclosures.

• Yes, I like it, but who really cares?• Using fake likes or similarly fabricated endorsements is a

prohibited.

Incentivize this!

73

• It’s a performance standard• Best incorporated into the message• Ad, Paid Ad, Paid Review, Sponsored

– “But it’s not a ad! It’s organic!”• Contest, Sweepstakes• Probably not #spon, “sweeps”

What do say? Where to say it?

74

• Step 1: Draft a social media policy• Step 2: Train your marketing people on what it means.• Step 3: Do reasonable monitoring.• Step 4: Don’t lose sleep over what rogue bloggers or

employees might say.

Social media policies

75

Wrapping UpThe value of social media marketing depends on

transparency of relationships

Material connections such as financial or family relationships should be disclosed when they’re not otherwise obvious to the reader

Disclosures should be made where the reader will notice them and in language the reader will understand

Richard L. Cleland

Assistant Director

Division of Advertising Practices

Federal Trade Commission

Washington, D.C. 20580

rcleland@ftc.gov

202-326-3088

Contact Information

77